At some point, every business owner needs to decide whether to take credit cards. On the upside, accepting cards means you'll never miss out on a sale because a customer isn't carrying enough cash or, in some cases, doesn't presently even have the money. On the other hand, taking credit cards involves significantly more cost and responsibility than taking only cash or checks.

Benefits

Unlike a check, which can take days to clear, you receive immediate feedback as to whether a customer's credit or debit card payment went through. You also never have to visit a bank to deposit cash and checks. The amount you stand to lose in the case of a robbery or even employee theft is limited to the amount of cash you have in the register, so more credit card sales can mean less liability.

Expert Insight

As business.gov points out, not accepting credit cards can significantly limit your sales. Cash is no longer consumers' most popular payment method. Customers increasingly expect to be able to pay with a card and correspondingly tend to carry less cash in their wallets. If someone has to return later to make a purchase because he doesn't have enough cash on him at the time, you may lose that purchase forever.

Features

Most small businesses cannot afford to extend credit to customers for big-ticket items, and managing installment and layaway plans can be a hassle. Accepting credit cards improves your chances of selling more expensive items, as consumers can pay their credit card bill off over time while the credit card merchant pays you the full amount right away.

Potential

New companies and technologies have made it easier than ever to start accepting credit cards without a traditional merchant account and credit card swipe terminal. For example, Square is an application for select mobile phones, and the iPad that lets you swipe cards on the go using a small plug-in gadget. Payments post to your bank account the same business day. PayPal, Google and Amazon all offer payment platforms that let you accept credit cards through your website or by manually typing a customer's information into a secure web form.

Disadvantages

You may have to wait a month or more to receive funds from customers' credit cards payments. If a customer uses a stolen credit card to make a purchase from your store, you may be ultimately be held liable for the charges. This can also happen if a customer issues a charge-back, which can happen if a customer is unhappy with the purchase or even just confused; while you can contest a charge-back by providing the credit card company with a signed receipt, you may not always win.

Accepting credit cards lowers your net profit because you must pay a percentage of each sale--typically around 3 percent--to the credit card merchant. In most cases it is against your merchant card agreement to pass these transaction fees on to the customer.

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Choose Citation Style

Martin, Marina. "Why Would I Want to Accept Credit Cards at My Business?" Small Business - Chron.com, http://smallbusiness.chron.com/would-want-accept-credit-cards-business-1976.html. Accessed 25 May 2019.

Martin, Marina. (n.d.). Why Would I Want to Accept Credit Cards at My Business? Small Business - Chron.com. Retrieved from http://smallbusiness.chron.com/would-want-accept-credit-cards-business-1976.html